- Nigeria’s electricity distribution companies generated N3.95 trillion in revenue from 2019 to Q1 2024, with steady annual increases.
- Key factors driving revenue growth include tariff adjustments toward cost-reflective pricing and the National Mass Metering Programme, which improved billing accuracy and reduced losses.
- Despite revenue growth, Discos faces high unpaid bills, electricity theft, infrastructure deficits, and ongoing energy losses.
Recent data from the National Bureau of Statistics (NBS) and the Nigerian Electricity Regulatory Commission (NERC) show that Nigeria’s electricity distribution companies (Discos) earned N3.95 trillion from 2019 to the first quarter of 2024.
The data shows consistent revenue growth over five years. In 2019, Discos collected N482.6 billion, which increased to N526.8 billion in 2020. By 2021, revenue jumped to N761.2 billion, reaching N828.1 billion in 2022. Furthermore, revenue peaked at N1.07 trillion in 2023, with N291.6 billion collected in the first quarter of 2024.
Analysts from the Nigerian Electricity Supply Industry (NESI) attribute the revenue growth to several factors, including tariff increases and the national metering programme. Ongoing tariff adjustments have driven this increase by moving prices toward cost-reflective levels, allowing Discos to align revenue with electricity costs.
The National Mass Metering Programme (NMMP) also significantly drove revenue growth. It increased the number of metered customers, reducing the reliance on estimated billing. As a result, Discos now collect revenue more accurately. Additionally, the NMMP helped cut Aggregate Technical, Commercial, and Collection (ATC&C) losses, particularly by improving technical efficiency and addressing commercial and collection issues, a persistent problem in the sector.
However, despite revenue growth, Discos continue to face significant challenges. Unpaid bills remain high, particularly from government agencies, which has strained cash flow. Widespread electricity theft, involving illegal grid connections and meter bypassing, cuts into revenue and increases the strain on the grid.
Infrastructure deficits, including inadequate transmission lines and substations, hinder efficient electricity distribution. Energy losses, both technical and non-technical, further reduce available electricity for sale, impacting revenue.
Despite these challenges, revenue growth shows promise for the sector. If Discos continue addressing these issues, they can sustain this positive trend in the coming years.